October 3, 2010
Justice for Haiti, via the Swiss
By MARK V. VLASIC
Twenty-four years after Jean-Claude “Baby Doc” Duvalier left a champagne-filled party at his presidential palace and boarded a chartered jet to flee Haiti, leaving a chaotic and economically scarred nation behind, a democratically elected government in Haiti now has a chance to recover millions of dollars of stolen assets.
That is because on Friday, the Swiss Parliament passed the “Return of Illicit Assets Act” (R.I.A.A.), an innovative legislative fix to a decades-old problem that, if implemented properly, may give added life to World Bank President Robert Zoellick’s assertion that “there should be no safe haven for those who steal from the poor.”
Taking over as “president-for-life” after his father’s death, Baby Doc Duvalier’s rule was characterized by greed and domestic neglect, resulting in a paralysis of national development. A world-class kleptocrat, for 15 years Duvalier and his associates stole Haitian funds and international aid money while exploiting Haitians for the benefit of sugar companies. Stolen cash was allegedly used to pay for fast cars, shopping vacations, jewelry and posh properties in foreign hotspots.
Only when faced with the near-total breakdown of the Haitian state, rioting, and a potential coup d’état did Duvalier acknowledge that his days were numbered and flee the country. Since then, it has been left to Duvalier’s successors in Haiti and a handful of hard-working officials in Switzerland, aided by the joint World Bank-United Nations Stolen Asset Recovery (StAR) Initiative, to try to recover the stolen assets for the benefit of the Haitian people.
Sadly, as we are reminded almost daily with reports of high-level corruption in Afghanistan and elsewhere, what happened in Haiti is not an isolated occurrence. According to World Bank estimates, corruption among holders of public office accounts for the misappropriation of between $20 and $40 billion each year. This corresponds to 20 to 40 percent of annual global development aid.
For this reason, there has been greater attention focused on combating grand corruption as a critical component in the fight against impunity — and thus a more concerted effort to track down and recover stolen assets. This was one of the reasons Mr. Zoellick made the StAR Initiative, a global partnership to help recover assets from past dictators, his first initiative after joining the World Bank.
With Switzerland’s landmark vote, the country that is traditionally associated with bank secrecy laws — which have been abused in the past to hide stolen assets — is poised to become an example of one of the most forward-leaning countries in the quest to return stolen assets to developing countries.
To be fair, Swiss efforts to return stolen assets are not new. According to Swiss reports, over the last 20 years the government has returned more than $1.5 billion in assets of criminal origin — including assets from some of the most famous kleptocrats in history such as Sani Abacha of Nigeria, Ferdinand Marcos of the Philippines and Carlos Salinas of Mexico. Despite these successes, however, asset recovery cases are not easy. They are governed by complex laws and international treaties, and as in the case of Duvalier, many languish for decades.
This is the reason why Switzerland developed R.I.A.A., which is designed for cases involving assets frozen in Switzerland which have been acquired unlawfully, but which cannot be returned via typical international mutual legal assistance channels due to failures in the victim state’s judicial system.
In such cases, where the country involved renders it impossible to conduct a proper exchange procedure, the new law would enable a unique “burden shift.” In these cases, should R.I.A.A. be implemented as envisioned, the Swiss government would only have to show that the funds held in Switzerland by an alleged corrupt official are significantly larger than what someone could have credibly earned in office, and that the country from which the funds originate was known to be corrupt.
Then the burden of proving that the money came from legal sources would lie with the allegedly corrupt official, rather than the Swiss state. If the official could not prove a legitimate origin of his or her Swiss assets, they would be confiscated by the Swiss state.
With the Swiss Assembly’s passage of R.I.A.A., it is expected that the last barriers to repatriating Duvalier’s frozen assets — an effort that began in 1986 — will finally be removed, and approximately $5.8 million will be soon returned to Haiti, a country desperately in need of good news and money. (Had the law not passed, the Swiss freeze would have expired, and the funds would have been returned to the Duvalier family.)
Let us hope that other major financial centers follow suit, that Haitian officials are emboldened to continue their fight against corruption, and that future dictators and kleptocrats around the world take notice. For it is only by international collective and targeted action that we can ensure that there will be no safe haven for stolen assets.
Mark V. Vlasic, an adjunct professor of law at Georgetown University and partner at Ward & Ward PLLC, worked on the Haiti/Duvalier asset recovery team while serving as head of operations of the World Bank’s StAR Secretariat. He currently serves as international legal adviser to the Charles Taylor/Liberia asset recovery team.